ULIPs

ULIPs combine benefits of insurance and mutual funds, investing a portion of the insurance premium in debt funds or bonds or listed equities and gives a return on investment.

Apnainsurance.com Research Bureau

20 Dec 2007

Unit-linked Insurance Plans (ULIPs) combine the benefits
of life insurance policies with mutual funds. A certain part of the premium is
invested in listed equities/debt funds/bonds, and the balance is used to
provide for life insurance and fund management expenses. Yields earned on
investments i.e. the value of the investment or the sum assured, whichever is
higher, is paid to the insured or nominee. This varies from company to company
i.e. some insurance companies pay the value of the investment in addition to
the sum assured.